Hedge funds bet on HBOS to fall

Business Spectator- Hedge funds sharply increased their bets against UK lender HBOS in the first days after the Financial Services Authority imposed new rules on June 13, targeting abusive short-selling and smooth the process for firms raising cash from rights issues, reports The Financial Times.

HBOS, Britain’s biggest mortgage lender, which earlier issued its prospectus for a £4 billion rights issue has seen its shares drop below the rights issue price, as hedge funds revealed their positions.

US hedge fund Harbinger Capital said it held a 3.3 percent short position, worth about 345 million pounds, in HBOS, under the new disclosure rules for companies during rights issues.

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